A few more thoughts on voluntary monthly content payments

By Steve Outing

My recent E&P column, “Forget Micropayments — Here’s a Far Better Idea for Monetizing Content,” generated a ton of conversation, blog items, and mentions in news articles around the world. I’m pleased with that, because a wave had been building of (mostly older) prominent journalists and publishers recommending that news organizations start charging for their content — and micropayments was seen as the most promising technology to achieve that.

That is SUCH a bad idea that I felt like the discussion needed to turn to alternatives. I had recently learned of one that I think shows promise.

The column and the overall debate about whether news companies can save themselves by all starting to charge for their content online (never mind the loss of audience and resulting loss of ad revenues), or whether that will lead to their demise, led to much praise for and some criticism of the concept behind a company I talked about in the column, Kachingle. A brief description of the Kachingle model and a lengthy comment thread debate can be found on my previous blog item.

I need to respond to some of the criticisms, so here goes…

1. Some critics interpreted my intention as saying that a contribution model covering and distributing money across many online content providers would save news organization budgets, alone. No, the Kachingle model is just ONE revenue source that newspapers and other news organizations using the Web should use. Many get money from participating in Google AdSense, for example; that has no effect on the rest of a site’s business model. The main way that most news websites will earn enough money to survive will continue to be advertising. A main focus for them should be on reinventing their ad models, because selling banner ads and classifieds advertising is broken. Kachingle is just another revenue source.

2. Charging for content is a dead horse. Most news content on the Web has been free for 15 years, and attempts to charge for commodity news content have failed again and again because what most news companies produce is easily replaceable, for free, with a few clicks elsewhere. Even if the network contribution model brought in a modest amount of money to news publishers, it would be better than the negative revenue growth that likely would result from trying to charge for Web news content.

3. I got notes from a few people calling the Kachingle model of online users supporting their favorite websites via a central, nearly frictionless system as “nationalization” of news publishers. What?!! I don’t even know how to respond to that crazy charge. See point No. 1 for why that notion is completely without merit.

4. The Kachingle idea gets a thumbs down from some people because they don’t like the idea of voluntary. Most people will be cheapskates and refuse to sign up for a monthly payment for content when they can get it for free, the critics say. Alan Mutter, in his blog Newsosaur, did a rough calculation of what a scaled-up Kachingle model might bring to publishers, based on a 2% take-up rate by web content consumers, and found that while it could bring in real money, it’s not enough to save the downtrodden newspaper industry, for example. He dismissively titled his blog post “Tip-jar journalism: Slim pickin’s for pubs.” (Actually, I don’t think Mutter understands the system, since he says he “assumed that site visitors would click the Kachingle button on 2% of the pages.” Kachinglers click a website only once to financially support it, then the site gets credit whenever a supporter subsequently visits on a single day; it’s not counting page-views.)

I take issue with the term “tip jar,” because many sites have tried putting individual tip jars on their pages, and success has been limited. A system that encourages every website to individually ask for money would be a failure. Who wants to feel like their getting panhandled wherever they go on the Web? I’m talking about something different, beyond the tip jar.

I think the challenge (and the solution) is in how Kachingle accounts are marketed. Forget the “tip” terminology. Tell people that if they want quality news content to continue to be available on the Web, they need to pay for it. Tell them there’s a system that makes it super-simple for them to assign $5 a month (or whatever amount they choose) to support just the websites and blogs that they like and would like to see continue.

Publishers could even provide incentives for Kachingle members (whether they support your specific site or not). If a site visitor is a Kachingle account holder, give them access to some online goodie (e-book, archive access, whatever). If a visitor is a Kachingle member AND supports your site financially via the system, perhaps there’s an extra goodie or service made available to them. (I offer this as an idea, but frankly I haven’t thought it through; there could be unintended consequences, for example, of rewarding Kachinglers who financially support you.)

Also, there an entire field of persuasive technology that can be applied to this problem of web publishers, bloggers, and Kachingle working together to encourage the behavior we want: Pay $5 a month or whatever you wish to support your favorite bloggers and websites. Notice how persuasive technology is described in the Wikipedia link above: “intentionally changes attitudes or behaviors through persuasion and social influence.” Perhaps the Stanford Persuasive Technology Lab can be of assistance in tackling this problem.

Mutter’s 2% figure can be increased to a point where it means significant money for small and large online publishers. An important and effective marketing tool is “social proof,” where a website (and this applies to all sorts of products and services in the virtual and real worlds) brings in new customers by demonstrating how many other people are already using it. Kachingle builds in that social proof with tools that allow you to see how many people are supporting a site via that system. You can even see who supports a specific site financially (assuming a supporter has a privacy setting adjusted to allow that). A site can even show off how much money its fans are contributing via Kachingle (another social proof measure).

A Norwegian newspaper website columnist wrote about my column and explained the Kachingle concept recently, and posted a poll of his readers. Of the nearly 2,000 respondents, 22% said they would be willing to pay a voluntary monthly content fee to support their favor sites and blogs. Just to speculate, let’s say that that’s 100% overly optimistic, and 11% of online users would pay a monthly fee of $5 to support their favorite web content. I think Mutter is underestimating the number of people who would participate.

This whole idea will only work if Kachingle scales up massively. (Keep your fingers crossed for a Google acquisition or partnership. That could do it.)

5. My E&P column was too long. Yes, my critics are correct. Mea culpa.

Please don’t let that be the reason to dismiss this model. :) No one has tried the donation model applied in a user-simple manner across all manner of online content. If charging for news content on the web won’t work, and micropayment barriers will just turn legions of potential readers (and viewers of ads) away, why not put heart and soul into this “crazy” new model and see if it can work to adequately supplement web advertising?

Most news executives are so wary of jumping outside the box. C’mon, you’ve got a serious money problem and you need new solutions. Try something different!

Author: Steve Outing Steve Outing is a Boulder, Colorado-based media futurist, digital-news innovator, consultant, journalist, and educator. ... Need assistance with media-company future strategy? Get in touch with Steve!

11 Responses to "A few more thoughts on voluntary monthly content payments"

  1. Josh Young
    Josh Young 8 years ago .Reply

    Steve, I don’t mind the idea of charity, but I think an even better idea lies in finding something for which users of news will pay. They’ll pay for access and interaction with the journalists whose work they read and discuss with friends.

    http://networkednews.wordpress.com/2009/02/11/no-micropayments-maybe-charity-yes-freemium-news/

  2. adam
    adam 8 years ago .Reply

    I dont care about newspapers struggling,hey,everyones struggling,im not paying for the published lies perpetuated by a biast machine,you want to make money,write a book called
    whining about things changes nothing.

  3. Steve Outing
    Steve Outing 8 years ago .Reply

    Josh: I’ve thought about that idea too, but I can’t past the problem of the journalists you (reader/user) want to interact with will mostly be too busy to participate. Some do interact, but it’s more because they want to and feel some passion for engaging directly with their fans and followers and readers. Many journalists I know resist the idea because they’re “already too busy.” (Bad attitude, IMO, but not easy to change.)

    Y’know who this model would work great for? Professional athletes with not-too-massive celebrity. Steelers QB Ben Roethlisberger would be too overwhelmed, but one of his offensive lineman might make some money with your idea. Or a pro climber with passionate fans, because the niche is small enough that it would be workable.

    Spinning off that, a news organization could be the athlete’s home base for this paid-interaction scheme — but more likely it would work for the athlete’s personal blog.

  4. Teach_J
    Teach_J 8 years ago .Reply

    Stop trying to sell content. Sell the device. What we really need is a portable device that is part Kindle, part iPhone, part laptop, part game device, part internet device – portable, always on, easy to carry and not too expensive. I envision a device about the size of a netbook screen. It would be touch or stylus sensitive. Expandable with a small keyboard. And you would be able to sell very inexpensive subs ($20/year for all the print pubs available) to content on it via a store like the iTunes store. You could also buy movies, music, games, and more. Price it under $300 and you would be making tons of profits to support the journalism. Let someone else develop it and you are at their mercy again.

  5. Charles Batchelor
    Charles Batchelor 8 years ago .Reply

    Responding to the above and comments on my comments made at the E&P blog and Alan Mutter,…

    Steve’s first point should be studied carefully: Kachingle is not THE answer. But, it might help provide some $$.

    My fear is that it would damage the newspaper’s local brand and undercut what they might charge for ads and subscriptions. I wish it were not true, but the reality is that many perceive value by price.

    I am looking for, and trying to develop, ways for newspapers to add value and thus enhance their local brand.

    Kachingle deployed carefully, however, on some products, in some markets, might even enhance a brand, making a blog or marketplace “of and for the people,” for example. How a publisher packages it will make all of the difference.

    But, again–and thank you Steve for saying it–newspapers need to seriously consider lots of different, little things. The goal is to build the most powerful network locally for news, marketing and information. That will enhance their brand and their bottom line, both.

  6. Josh Young
    Josh Young 8 years ago .Reply

    Hey, Steve, thanks for giving my proposition a read!

    At one level, you’re obviously correct: no one wants more work, and to the extent that my proposal involves interaction between the journalist and the user, there’s more work. Fine. No one’s arguing that it wouldn’t be different, unfamiliar, tough, etc.

    But at another level, the journalist would be paid, potentially a big chunk of his income, by offering special access to some users. Is it really the case that journalists think of themselves as so busy that they can’t imagine a (very) different way of doing business?

    I mean, the actually good argument you might offer is this: “Look, journalists only have so many hours in the day. Users will pay them for some things that don’t require additional work, but users will also expect some of their time directly. That means a journalist either loses sleep or has to cut back on reporting. Lost sleep isn’t an option. And although cutting back on reporting might seem plausible, it’s really not, because it would dilute the other side of reporters’ value proposition to their users so much that their users wouldn’t really want to pay enough anymore. The market’s just not there.”

    Of course, I happen not to think that argument has much purchase. Arguing about how busy with reporting journalists are *now* fails to locate my proposition in the relevant context, which could look more or less radically different from now.

    The amount of reporting per journalist might decrease, but that’s not a reason in itself that the aggregate amount of reporting would decrease. There could simply be more reporters! So if the average reporter had to reallocate twenty percent of her time to reader interaction, a twenty-five percent increase in reporters would fill the gap.

    Of course, the whole proposition is that there’s a real human value proposition, trust between creator and user, that charity simply lacks. So while it’s certainly true that my proposition would be a big flop in the market if it turned out that users were only willing to pay creators for interaction that amounted to BFFs, which would prevent creators from creating, it’s not at all clear that users wouldn’t tolerate somewhat less reporting in order for access to and some connection with creators, especially in light of the fact that trust is sorely lacking between journalists and readers today.

  7. […] deepening and an extension of Mitch Ratcliffe’s idea: I’ve thought about that idea too, but I can’t [get] past the problem of the journalists you (reader/user) want to interact with will mostly be too busy to participate. […]

  8. Eydie
    Eydie 8 years ago .Reply

    I do have to congratulate any member of the old guard to grasp new media and offer possible solutions to the death of an industry I loved. I still think there has to be a way to make ad-supported quality content work–look at the weekly free news publications like Village Voice/New Times, which are completely ad-supported, both in print and online. (The real death knell to quality writing isn’t ads; it’s the need to have popular keywords litter copy at the expense of prose, heheh.)

    When publishers don’t grasp the importance of a branded website–we’ve all seen those city-branded sites where the local paper’s content is a bit of an afterthought–then how can they be expected to leverage digital media into revenue? Let the national/international news sites grab the lion’s share of online readers of free content. City papers need to promote the heck out of the fact that they offer unique information that’s valuable to the denizens of that town. Then, like print subscribers of an earlier age, those readers be willing to pay for this content, whether through a micropayment program or another method.

    Since I spent a decade working on newspapers, I still see their value and hope they won’t die. I recently offered some detailed advice on how to save daily publications using digital media as part of a multi-channel strategy:

    http://www.mobilestorm.com/digital-marketing-blog/branding-roi-go-hand-in-hand-for-newspapers/

    http://www.mobilestorm.com/digital-marketing-blog/sms-email-marketing-can-help-newspapers-survive/

  9. […] and Publisher & Steve Outing via […]

  10. David Threshie
    David Threshie 8 years ago .Reply

    Kachingle has merrit but here are some ideas for your consideration.

    First, use a micropayment system to peak load price the top five stories of the day. If you want to read the local story of the day, then you’ll have to make a micropayment. Who wouldn’t pony up to get the latest on fire coverage or the story about the guy who saved someone’s life? Subscribers to the site would have full access (maybe bundle this with a print subscription?) but the non loyalists to the site would have to pay a little to read the content.

    Second, wall off the top three features overall. So for the Orange County Register for example, require micropayments if you want to read OC Varsity, Frank Micadeit or Jonathan Lansner. Subscribers to the site would have full access.

    Third, wall off periodicals. Make people pay a little to get a story that ran last week.

    Fourth, try to find a way to make the news aggregators pay for the content they’re making tons of money from.. I could see getting paid on a per click basis when someone doing a Google search clicks on a newspaper’s story.

    Bonus idea: have every north american news agency agree to wall off their content from the news aggregators. The absence of free news would force people to have to pay their local news websites a fee.

    I think the idea of partnering with local cable providers has some merit but I like the micropayment idea better.

    Every once in a while we’re given the opportunity to do something transformative. Who says media companies have to keep giving away content for free? Now would be the time to draw a line in the sand.

    My two cents.

  11. Lyndon
    Lyndon 8 years ago .Reply

    Great post! I completely agree that charging site content outright is a bad idea. Many great sites give the users a glimpse of their site before the visitor could decide of the rate is wotth it

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